Greece Repays €2.05 Billion Arrears to IMF

Greece has cleared overdue debt repayments of €2.05 billion to the IMF and is no longer in arrears, the creditor has confirmed.

The repayments, and another for €4.2 billion to the European Central Bank (ECB) due on Monday, came after the EU made Greece a short-term loan of €7 billion.

Greece missed one repayment to the IMF in June and another earlier this month.

Earlier on Monday, Greek banks reopened after being closed for three weeks.

However, many restrictions remain and Greeks are facing price rises with an increase in VAT.

IMF spokesman Gerry Rice confirmed in a statement that Greece had repaid the totality of its arrears.

“As we have said, the fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth,” he said.

Greece missed its first repayment to the IMF on June 30 and another on July 13 during deadlock over negotiations for a third bailout.

The crisis brought Greece to the brink of economic collapse and an exit from the euro.

The Greek government has since reached a cash-for-reforms deal with its creditors and negotiations are due to begin on the proposed €86 billion rescue package.

For the past three weeks, Greeks have been waiting in line at cash machines to withdraw a maximum of €60 a day, a restriction imposed amid fear of a run on the banks.

From July 20, the daily limit becomes a weekly one capped at €420, meaning Greeks will not have to queue every day.

However, a block on transfers to foreign banks and a ban on cashing cheques remain in place.

VAT is rising from 13% to 23% meaning Greeks will pay more on a range of goods and services, including taxis and restaurants.

The rise was among a package of reforms demanded by Greece’s creditors.

PM Alexis Tsipras faced a rebellion from within his left-wing Syriza party over the tough austerity measures being demanded by other eurozone leaders, who are among Greece’s creditors.

He has since replaced his rebel ministers but analysts say his government has been weakened and fresh elections may be held in September or October.

The Greek parliament is due to hold a second vote on July 22 on measures including justice and banking reforms. The government is again likely to scrape through, supported by opposition parties.

Representatives from Greece’s creditors – known as the Troika – are due to arrive in the country soon and talks on the new bailout are expected to last about a month.

The eurozone is currently managed by the Eurogroup, made up of the finance ministers of each nation.